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by ForexNewsNow Team on October 6th, 2010

GBP/USD pares gains after IMF warning over U.K. housing market

GBP USD analysis - U.K. housing market warningNEW YORK (Forex News Now) – The pound pared gains versus the U.S. dollar on Wednesday, after the International Monetary Fund raised the prospect of a double dip recession in the U.K. property market.

In early European currency market trading, GBP/USD hit 1.5939, cable’s highest since Aug. 9. The currency pair later retreated to trade at 1.5894, up 0.02 percent on the day.

Earlier Tuesday, the IMF said house prices in Britain were over-valued and vulnerable to a drop, saying in its World Economic Outlook that it was “worrisome” that U.K. property prices were still so expensive.

According to GBP USD analysis, cable was likely to touch support around last Thursday’s low, 1.5669, and encounter immediate resistance around the high of Aug. 6, 1.5998.

The pound’s gains also came on in the wake of a disappointing U.S. jobs report.

The payroll processing company ADP said earlier that private U.S. employers shed 39,000 jobs during the month, after adding a revised 10,000 in August. Analysts had expected the data to show an increase of 23,000 new jobs, according to two currency market trading news outlets.

Elsewhere, sterling slid versus the euro: EUR/GBP traded at 0.876, up 0.6 percent, according to intraday analysis.

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